Analysis of energy drink segment

1. SEGMENT OVERVIEW
INDIA
 Fastest growing sector within the beverage industry
 Top two players in India – Red Bull (62%) and Cloud 9 (25%)
 About two-third of energy drink consumers are males.
 Mainly targeted at 20-35 years of age but this trend is
changing with the new arrivals.
 Competition in India is lesser as compared to global markets
 Available in cans, pouches and solid-mix
 Global leaders: Red Bull and Monster energy drink
 Off trade sale share is 70% and on trade is 30%
Products
Value in Rs.
(Mn)
%of Total Category
Value in India
Bottled Water 173069 40%
Carbonates 179507 41%
Fruits and
vegetable Juices 69183 16%
Concentrates 6375 1%
Sports and
Energy Drinks 6510 1%
Total 434664 100%

2. VALUE CHAIN
 Offer increased energy boost because of the ingredient profile of caffeine, taurine, herbal
extracts and vitamins.
 May improve mood, enhance physical endurance and reduce mental fatigue
 It is known as the party drink and often used with alcohol
 According to Mintel market for sport and energy drink has grown from £1bn to £1.5bn during
2009-2014 as tired consumer try these products to beat fatigue
 Many soft drinks contain antioxidant polyphenols extracted from fruits that act as health-
promoting constituents that help protect the body from
 the effects of free radicals that can harm proteins, lipids and DNA
 Cancer and coronary heart diseases
 The sugar-free packs can be helpful for diabetic people. They can also help in weight-loss by
acting as a substitute for carbonated soft drinks as they are completely fat-free.
INHIBITORS
 Huge market share of soft drinks and bottled water in India.
 Low competition. Less aggressive marketing.
 Huge amount of caffeine considered to be bad for health.
 Limited to sports, music and cultural events.
 Preference of other drinks over energy drinks.
 Awareness limited to metro cities and other A cities.
 Limited flavors which might not be suitable for Indian taste

3. Strengths
Reasonable pricing (twice cheaper
than Red Bull)
Huge online audience with own
Social network (Monster Army)
Increasing popularity
Contains natural ingredients
Innovative
Weaknesses
Harmed reputation because of
death occasions
Limited market place reach No
top-of-mind awareness
No used advertising Monsters
marketing audience now is limited
by extreme sport fans and
aggressive music
Limited distribution model
Opportunities
Huge opportunities for entering new
markets- Entering developing
markets
Finding and promoting (not direct
and official) appropriate alcohol
combination as Red Bull Vodka
Usage of knowledge in producing of
healthy natural drinks (back to
Hansen’s roots). It may allow them
to increase visibility and revenues
from warehouse segment
Buyout Target – Maybe know is the
time to be picked up by the larger
business. (ex. Coca Cola)
Threats
Increasing public awareness about
harm of energy drinks leading to
shift of students values to the
healthy habits
Increasing competition
Possible price wars launching by
private labels (ex. Carrefour energy
drink)
Enhancing government’s regulation
of energy drink market
Rival company Red bull already
provides regular campus activities
and Red bull sponsorships of major
TA parties
Strengths
Industry leadership –dominant 43%
US, around 60% India)
Successful Marketing capabilities-
by sponsoring dangerous sports
such as Formula 1 driving; free
skiing; BMX biking and many more
Alliance with major distributors-
Cadbury Schweppes in Australia
that can help it to reach channels
like Vending machines
Weaknesses
Lack of innovation- some competitors
are coming with vitamin and glucose
drinks while Red Bull continues with
its old products
Reliant on small product base-
Nowadays there is a change in
consumers’ interests toward healthier
alternatives such as decaffeinated
drinks
Marketing expense it needs to spend
so much money on advertising as
competitors like Pepsico are catching
up
Opportunities
Diversification of retail outlets-
Vending machines used as effective
advertising and sales tool
Extension of product line- Red Bull
can introduce new products and can
capitalize on its strong consumer
awareness
Geographical expansion- Red Bull
sells products to more than 100
countries and id now expanding I
developing countries
Threats
Public health concerns- because of
its high caffeine content and other
ingredients it is considered deadly in
some situations
Lack of Patent
Maturing market Red Bull’s target,
generation Y is becoming older
Consumer awareness of health and
well being- increasing growth of
bottled water sales is a sign that
people are becoming health
conscious
SWOT
ANALYSIS

4. Rivalry among
existing
competitors: High
3 companies share
the majority of the
global market, while
hundreds of other
little brands are
fighting in a local level
Threat of Substitutes: High
Health conscious customers
Use of kava and valerian root
which are common ingredients
in relaxation drink are not
approved by US FDA.
Bargaining
power of Buyers:
High
Growing number of
brands
Many sellers have
equal competitive
strength
The relative maturity
of sports drink and
energy drink
segment
Threat of New entrants:
High
There are few players which
manufacture with natural
ingredients and have no
side-effects.
Bargaining power
of Suppliers: Low
Mature and
saturated market,
price-conscious
consumers
Coca-Cola and
Pepsi-Cola dominate
vending machines

5. UNMET NEEDS
 Health concerns about energy drink
- access amount of caffeine
 Energy drink for diabetic patients
as it is growing market at 10-11%
per year
 Energy drink in various flavors as
currently most of the company are
having limited flavors
 Carbon neutral energy drink so that
they can build goodwill as the green
company
 Sport specific energy drink – developing
variants of energy drink according to sport
 Brain boosting energy drink

6. NEW OFFERINGS
 Health beneficial ingredients like Ginkgo,
Guarana, Ginseng, milk thistle will be used
in certain amount
 Jamun seeds mixed with energy drink in
small proportion for diabetes patients
 New flavors according to demand can
be launched
 New shapes and styles of packaging
 Organic development so that no harm to
earth – they can earn carbon credit and
position themselves as green industry

7. Marketing Strategy for the new offering
 Marketing Health Nutrition
 Energy drink for Diabetes patients
 Packaging
 Energy drink simulators
Energy drink products have positioned itself as the drink for youth, party lover,
tired people and energy booster. Promoting using simulators will help to
achieve higher market share.
Energy drinks can build its image using herbs and position itself as health
conscious brand.
According to diabetic journal, number of diabetic patients is increasing with
10-11% annually. There are currently 10mn people suffering from diabetes
in India only. Using Jamun seeds can give them competitive advantage to
capture higher market share in this sector.
Energy drink industry can change its packaging according to its
target audience

8. MARKETING MIX
Product
Energy drink for diabetic patients
Herbal blend of Ginkgo, Guarana, Ginseng and milk thistle
Jamun seeds add ins
caffeine for stimulating effect
Alpine spring water – highest quality of clean water
250ml can give 80 mg of caffeine same as a cup of coffee
Price
Rs. 120 per can or 250ml of energy drink
Discount on pack of 4 – Rs. 380 for pack of 4
Higher discount on bulk sell – up to 10%
Place
On trend(Available directly from the retailers) and off trend (Available at canteens, clubs,
restaurants, theatres, jogging courts, sport grounds)
Distribution at Super markets and supermalls through supply chain
Available at Gyms and fitness club
Online delivery
Promotions
Promoted as the health conscious energy drink
Recommended by doctors and physicians
Mass media campaign for brand awareness

10. THANK YOU